What organizations are considered an “instrumentality” of the Federal government, or of a State or local government, for purposes of determining if an employer is not eligible for the FFCRA leave credits? (Added November 25, 2020) Note: To the extent that public sector employers provide paid leave wages under the EPSLA or Expanded FMLA, under section 7005(a) of the FFCRA, the paid leave wages are not subject to the employer’s share of social security tax. (The requirement to provide paid leave under the EPSLA or Expanded FMLA for periods after December 31, 2020, was not extended by the COVID-related Tax Relief Act of 2020.) For more information on whether and to what extent public sector employers must provide paid leave wages under the EPSLA or Expanded FMLA, Families First Coronavirus Response Act: Questions and Answers, available at the DOL’s website. However, for periods of leave between Apand December 31, 2020, under the Department of Labor (DOL) rules, non-federal public sector employers generally must provide paid sick and family leave wages under the EPSLA and Expanded FMLA, respectively, while federal public sector employers generally must provide paid sick leave wages under the EPSLA. The Federal government, the governments of any State or political subdivision thereof, and any agencies or instrumentalities of those governments are not Eligible Employers and are not entitled to receive tax credits for providing paid leave wages under the EPSLA or Expanded FMLA.
Can government employers receive tax credits for providing paid leave wages under the FFCRA? (Updated January 28, 2021) In this case, the Eligible Employer may claim the credit for any such qualified sick leave wages it pays to the employee, as well as the credit for allocable qualified health plan expenses and the Eligible Employer’s share of Medicare tax on those qualified sick leave wages.įor information on who is a health care provider and emergency responder, see “Who is a ‘health care provider’ who may be excluded by their employer from paid sick leave and/or expanded family and medical leave?”, at the Department of Labor’s website. For example, if an Eligible Employer excludes an employee who is a health care provider from taking paid sick leave to care for an individual family member, but does not exclude the employee from taking paid sick leave for reasons relating to the employee’s own health status, the Eligible Employer is required to provide the employee with paid sick leave if the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 or is experiencing symptoms of COVID-19 and is seeking a medical diagnosis. The preamble to the Department of Labor regulations explains that, because an employer is not required to exclude these employees from eligibility, if an employer does not elect to exclude a health care provider or emergency responder from taking paid leave under the EPSLA or Expanded FMLA for a reason related to COVID-19, it is subject to all other requirements of the FFCRA. (For periods of leave between Januand March 31, 2021, although credit may be claimed for paid leave that would have met the requirements of the EPSLA or Expanded FMLA, there is no requirement to provide paid leave.) Regulations issued by the Department of Labor Wage and Hour Division define which employees are considered health care providers and emergency responders for this purpose. For periods of leave between Apand December 31, 2020, the FFCRA provides that Eligible Employers may exclude employees who are health care providers or emergency responders from the paid sick leave and expanded family and medical leave requirements. If an Eligible Employer that employs a health care provider or an emergency responder excludes the employee from eligibility for paid sick leave or family leave for one or more reasons but not for other reasons, may the Eligible Employer claim the credit for paid leave it provides to the employee for any “non-excluded” reason? (Updated January 28, 2021) These FAQs do not currently reflect the changes made by the American Rescue Plan Act however, please continue to check IRS.gov for any updates related to the change in law.
Note that the American Rescue Plan Act of 2021, enacted March 11, 2021, amended and extended the tax credits (and the availability of advance payments of the tax credits) for paid sick and family leave for wages paid with respect to the period beginning April 1, 2021, and ending on September 30, 2021. These updated FAQs were released to the public in Fact Sheet 2022-16 PDF, March 3, 2022.
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